What Are Leverage, Company Size, and Social Disclosure Considered to Reduce Market Response to Earnings Response Coefficient as an Intervening Variable?

Abd Rohman Taufiq; Lin  Oktris; Maisarah Mohamed  Saat

doi:10.26740/jaj.v15n2.p151-157

Authors

Abd Rohman Taufiq Accounting Departemen, Faculty of Economics, Universitas PGRI Madiun
Lin Oktris Accounting Department, Faculty of Economic, Universitas Mercu Buana
Maisarah Mohamed Saat Accounting and Finance Department, Azman Hashim International Business School (AHIBS), Universiti Teknologi Malaysia

DOI:

https://doi.org/10.26740/jaj.v15n2.p151-157

Keywords:

leverage, company size, social disclosure, earnings response coefficient

Abstract

Introduction/Main Objectives: This research examined the influence of leverage, company size and
social disclosure on the earnings response coefficient as an intervening variable. Background
Problems: Research showed that leverage ability, company size, and social disclosure influence the
earning response coefficient. Furthermore, the company size variable positively influenced ERC in
various industrial sector companies on the Indonesian Stock Exchange. Research Methods: This
type of research used quantitative methods. The research data was manufacturing companies that
were registered with an IPO before 2016 and were still listed on the IDX from 2016 to 2020. For
this reason, this regression model was suitable for testing and examining the effect of leverage on
the earning response coefficient. Finding/Results: The larger the company size increases the market
response because the company was considered capable of providing high returns. The social
disclosure variable does not influence ERC in various industrial sector companies on the Indonesian
Stock Exchange. Social disclosure was a principle or reaction carried out by companies to
participate in community activities in general. This practice causes the company's asset value and
profits low while the debt value and losses were high. Conclusion: High social disclosure was
considered to reduce market response. On the other hand, low social disclosure was deemed to
increase market response.

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